What’s “Fair Use” in Trademark Law and How Does it Apply to My Business?
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Fair use is an exception to the limited monopoly created by most intellectual property rights, including trademarks and copyrights. This post focuses on how fair use applies to trademarks. A follow-up article will address copyright fair use. If you are unsure which applies to your situation, you may also find it helpful to read my earlier article, What’s the Difference Between a Trademark, a Copyright, and a Patent?
Categories of Fair Use
Under federal law, three primary types of fair use apply to trademarks: nominative fair use, descriptive fair use, and parody. Each plays a unique role in balancing trademark rights with the need for honest communication in the marketplace.
Nominative Fair Use
Nominative fair use occurs when someone uses another party’s trademark simply to identify that party’s product or service. In other words, you can refer to a well-known brand to describe compatibility, comparison, or identification, provided you do so accurately and without suggesting false sponsorship.
For example:
- An aftermarket auto dealer might advertise “wheels fit for Ford Mustang.”
- A software company could market a product as “compatible with both Windows and Apple.”
- A local coffee shop might advertise itself as “like Starbucks, but locally owned.”
Courts have clarified that nominative fair use is permissible when:
- The plaintiff’s trademark is necessary to identify the product.
- The user does not take more of the mark than necessary.
- The reference accurately reflects the relationship between the products or services.
Descriptive Fair Use
Descriptive fair use applies when a trademarked term is used in its ordinary, descriptive sense rather than as a brand. It is a complete defense to infringement if the term is used fairly and in good faith. The key question is intent: did the user set out to describe their own goods or to trade on the goodwill of the trademark owner?
For example:
- A bakery might describe its pies as “sweet and tart” even though SWEETART is a candy brand.
- A beverage company may label a drink as “apple flavored” even though APPLE is a technology brand.
- A shooting range could advertise “we have a moving target.”
If the purpose is to describe your product’s qualities rather than confuse consumers about its source, descriptive fair use likely applies.
Parody as Fair Use
Parody is a narrower form of trademark fair use. It applies mainly in dilution cases, where famous marks are protected even without showing likelihood of confusion. Parody allows a business or individual to poke fun at, criticize, or comment on a famous brand in a way that makes clear it is not the original product.
Think of parody uses of globally recognized trademarks such as NIKE or AMAZON. By definition, the mark being parodied must be famous, and the parody must be obvious enough that consumers are not confused. If the intent is to mislead consumers into believing the parody is genuine, the defense will likely fail.
Why Fair Use Matters for Businesses
Fair use helps businesses describe their own goods and services, compare products, and even use humor or commentary without automatically triggering liability. The key is honesty and good faith. If your use of another brand’s trademark is intended to inform customers rather than mislead them, you may be protected under fair use.
Still, the line between permissible fair use and trademark infringement can be blurry. Missteps in how you reference another brand could lead to costly disputes.
Final Thoughts
Honest communication with customers, whether to describe qualities, make comparisons, or comment on competitors, will usually be protected under fair use. But because trademark law involves gray areas and subjective judgments, it is wise to get legal guidance before you rely on fair use as a defense.
To ensure your business stays on the right side of trademark law and avoids unintended liability, contact Jimerson Birr.